Auction reprieve for loan holders

Thousands of overstretched loan holders will be given more time to repay their debts after an Athens court decision ruled yesterday that lenders cannot auction off a secured customer’s home without allowing for a seven-year period to resettle the debt. According to the ruling, banks are obligated to allow customers who fail to meet their mortgage payments between five and seven years to resettle the outstanding loan as dictated by the law. The move effectively stops lenders who rush to auction off mortgaged homes instead of giving loan holders time to pay up. Banks argued that not all customers qualify for the extra period. Lenders claimed that loan holders can only be allowed the extra seven years if the total amount owed is more than three times the size of the original loan. The president of the Loan Holders’ Association, Sefis Anastasakos, said that the news will save thousands of homes from going under the hammer. «For the first time, a court is putting the brake on banks by saying that the resettlement period for the debt of five to seven years is applicable to all loan holders regardless of the size of the outstanding amount,» he said. The news is positive for Greek home owners, who are likely to see their interest rate rise today when the European Central Bank is expected to increase its benchmark rate to 3 percent from 2.75 percent currently.

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